Final Cost Management Ass

RIFT VALLEY UNIVERSITY
MPM/2022
Group Assignment
1. You have been selected to project manage the construction of a sports centre and the project is
3 months into phase 2, which is to complete the final fit (all the interiors) of the ground floor, fit
out all the electrics, plumbing and gasworks for the first and second floors and finalize the
installation of the roof and air conditioning system.
When going through all the progress reports previously given to the Project Sponsor and
stakeholders, and those sent to the previous PM, you realize that this project phase had:
  a planned value of £280,000
  an earned value of £250,000 and
  actual costs amounting to £295,000
What are the implications for your project?
a) This project is on track to deliver and is within its budget
b) This project is behind schedule but is within its budget
c) This project is on schedule but over budget
d) This project is behind schedule and over budget
Solution
The earned value (EV) is £250,000, which is less than the planned value (PV) of £280,000.
Additionally, the actual costs (AC) amount to £295,000, which is higher than both the EV and
PV. Based on these values, the project is behind schedule (EV < PV) and over budget (AC > EV
and AC > PV).
Therefore, the (correct answer is option d) This project is behind schedule and over budget.
2. You have been selected to project manage the construction of a sports centre and the project is
3 months into phase 2, which is to complete the final fit (all the interiors) of the ground floor, fit
out all the electrics, plumbing and gasworks for the first and second floors and finalize the
installation of the roof and air conditioning system.
When going through all the progress reports previously given to the Project Sponsor and
stakeholders, and those sent to the previous PM, you realize that this project phase had:
MPM/2022
  a planned value of £280,000
  an earned value of £250,000 and
  actual costs amounting to £295,000
And what should you do about this situation?
a) Do nothing as you know the teams can easily catch up in the time left during this phase
b) b) Have an urgent meeting with the Project Sponsor to share this information and lay the
blame on your predecessor
c) Examine the PM Plan to find out where the variances happened and why and to see what
can be done to pull things back
d) Resign now because there are no contingencies left and the project cannot recover from
this mes
Solution
In this situation, the best course of action would be to (choose option c) Examine the PM Plan
to find out where the variances happened and why and to see what can be done to pull things
back. By examining the PM Plan and identifying the variances, you can determine the reasons
for the deviations and take corrective actions to bring the project back on track.
3. PV = $190,000 EV = $150,000 AC = $170,000

What does this mean? What are the SV and CV? Interpret your result
Solution
SV (Schedule Variance) = EV - PV = $150,000 - $190,000 = -$40,000
CV (Cost Variance) = EV - AC = $150,000 - $170,000 = -$20,000
The negative SV indicates that the project is behind schedule, as the earned value is less than the
planned value. The negative CV indicates that the project is over budget, as the earned value is
less than the actual cost.
4. PV = $190,000 EV = $150,000 AC = $170,000 A. What is the SPI? Interpret it B. What is the

CPI? Interpret it
MPM/2022
Solution
A. SPI (Schedule Performance Index) = EV / PV = $150,000 / $190,000 = 0.789
The SPI value less than 1 (0.789 indicates that the project is behind schedule.
B. CPI (Cost Performance Index) = EV / AC = $150,000 / $170,000 = 0.882
The CPI value less than 1 (0.882) indicates that the project is over budget.
5. PV = $140,000 EV = $160,000 AC = $145,000 what does this mean? What are the SV and
CV?
Solution
SV (Schedule Variance) = EV - PV = $160,000 - $140,000 = $20,000
CV (Cost Variance) = EV - AC = $160,000 - $145,000 = $15,000
The positive SV indicates that the project is ahead of schedule, as the earned value is greater than
the planned value. The positive CV indicates that the project is under budget, as the earned value
is greater than the actual cost.
6. PV = $140,000 EV = $160,000 AC = $145,000

A. What is the SPI?
B. What is the CPI?
Solution
A. SPI (Schedule Performance Index) = EV / PV = $160,000 / $140,000 = 1.143
The SPI value greater than 1 (1.143) indicates that the project is ahead of schedule.
B. CPI (Cost Performance Index) = EV / AC = $160,000 / $145,000 = 1.103
The CPI value greater than 1 (1.103) indicates that the project is under budget.
MPM/2022
7. PV = $240,000 EV = $250,000 AC = $270,000 Instructions: Interpret each Result

A. Scheduled Variance
B. %of scheduled variance
C. Cost variance
D. Scheduled of cost variance
E. Scheduled performance index (SPI)
F. Cost Performance index (CPI)
Solution
A. Schedule Variance (SV) = EV - PV = $250,000 - $240,000 = $10,000
B. % of Scheduled Variance = (SV / PV) * 100 = ($10,000 / $240,000) * 100 = 4.17%
C. Cost Variance (CV) = EV - AC = $250,000 - $270,000 = -$20,000
D. % of Cost Variance = (CV / AC) * 100 = (-$20,000 / $270,000) * 100 = -7.41%
E. Schedule Performance Index (SPI) = EV / PV = $250,000 / $240,000 = 1.042
F. Cost Performance Index (CPI) = EV / AC = $250,000 / $270,000 = 0.926
8. You are the project manager on a project that has $800,000 software development effort.
There are two teams of programmers that will work for six month for a total of 10,000 hours.
According to the project schedule your team should be done with 38% of the work. As of today,
the project is 40% complete while 50% budget has been used. Calculate and share your
conclusion
A. Scheduled Variance
B. %of scheduled variance
C. Cost variance
D. Scheduled of cost variance
MPM/2022
E. Scheduled performance index(SPI)
F. Cost Performance index (CPI
Solution
A. Scheduled Variance (SV) = EV - PV = 40% - 38% = 2%
B. % of Scheduled Variance = (SV / PV) * 100 = (2% / 38%) * 100 = 5.26%
C. Cost Variance (CV) = EV - AC = 40% - 50% = -10%
D. % of Cost Variance = (CV / AC) * 100 = (-10% / 50%) * 100 = -20%
E. Schedule Performance Index (SPI) = EV / PV = 40% / 38% = 1.053
F. Cost Performance Index (CPI) = EV / AC = 40% / 50% = 0.8
Based on the results, the project is behind schedule (positive SV), but over budget (negative CV).
The SPI indicates that the project is slightly ahead of schedule, while the CPI indicates that the
project is over budget.
9. Your project is scheduled for 2 years. There are six different teams working on five major
functional areas. Some teams are ahead of schedule while others are falling behind. There are
cost overruns in some areas but you’ve also saved costs in others. Due to all this, it is difficult to
understand whether you are over or under budget. Nine months into the project, while the total
project budget is $4,200,000, you’ve already spent $1,650,000. CPI is 0.875. Can you perform
EV analysis and forecast Instruction: Calculate
A. EAC
B. ETC
C. VAC
Solution
A. EAC (Estimate at Completion) = BAC / CPI = $4,200,000 / 0.875 = $4,800,000
B. ETC (Estimate to Complete) = EAC - AC = $4,800,000 - 1,650,000 = $3,150,000
C. VAC (Variance at Completion) = BAC - EAC = $4,200,000 - $4,800,000 = -$600,000
MPM/2022
10. The BAC-based TCPI (To-Complete Performance Index) can be calculated as follows:
TCPI = (BAC - EV) / (BAC - AC) = ($40,000 - $17,000) / ($40,000 - $15,000) = $23,000 /
$25,000 = 0.92
10. BAC is $40,000 and EAC is $30,000, EV is $17,000 and AC is $15,000.
What is the BAC-based TCPI
Solution
The BAC-based TCPI is 0.92, which indicates that the project needs to achieve a future CPI of
0.92 in order to meet the remaining work within the original budget.
The End

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RIFT VALLEY UNIVERSITY

3. PV = $190,000 EV = $150,000 AC = $170,000

4. PV = $190,000 EV = $150,000 AC = $170,000 A. What is the SPI? Interpret it B. What is the

6. PV = $140,000 EV = $160,000 AC = $145,000

7. PV = $240,000 EV = $250,000 AC = $270,000 Instructions: Interpret each Result

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